For the first time ever, the Rockford-area housing market recorded 12 straight months of year-to-year sales increases, the first full year of monthly increases since statistics have been recorded.
Rockford Area Realtors sold 340 homes in May, 23 percent more properties than 276 sold in May 2011. The longest previous sales streak ran for eight months ending in October 2001 (the longest since stats have been collected dating back to 1998).
For the first five months of this year, 1,352 homes and condos have been sold, a remarkable 30 percent more than 1,038 properties sold from January to May 2011.
The three-month rolling average price of $104,888 is up from $101,999 in April and higher than $103,916 in May 2011. This was the highest average price since $106,022 last September.
“Marketwide, home sales saw a full year run of month-over-month gains in May with the average price at its highest mark in eight months,” said Steve Bois, CEO of Rockford Area Realtors. “The market is heading up, for many of the reasons we’ve been pointing out: interest rates are still jaw-droppingly low, distressed housing sales are keeping prices competitive, and people are feeling better about the economy.”
Low interest rates are the real news of the current housing rebound and may help drive home sales the rest of the year. May 31, Freddie Mac announced the average rate on 30-year fixed mortgage loans fell to 3.75 percent, down from 3.78 percent the previous week and the lowest since long-term mortgages began in the 1950s.
Mortgage rates have been dropping because they tend to track the yield on 10-year Treasury notes, which fell to a 66-year low last week. Uncertainty about how Europe will resolve its debt crisis has led investors to buy more Treasury securities, which are considered safe investments. As demands for Treasury notes increase, the yield falls.
“Since the housing recession began in 2006, interest rates are down an amazing 43 percent from 6.53 percent in 2006 to last week’s rate of 3.75 percent,” Bois said. “We may never see interest rates this low again in our lifetime, a certain selling point for homebuyers.
“Today’s consumer is looking for an honest opinion on what’s happening in their local market and what that means to them about the house they want to buy or sell,” Bois added. “Real estate rates are at an all-time low today, as they have been for the last three weeks. We need to inspire confidence and certainty in this incredible market factor.”
30-year fixed mortgage rates
Principal + Interest on $150,000 home
2012 — 3.75 percent, $555.74
2011 — 4.76 percent, $626.70
2010 — 5.08 percent, $650.07
2009 — 5.59 percent, $688.14
2008 — 6.62 percent, $767.98
Note: Standard 20 percent downpayment
From the June 6-12, 2012, issue